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I was at the Salesforce.com Dreamforce conference this week to hear about the latest advancements from the cloud computing software giant. Salesforce has helped revolutionize cloud computing for business, and its social media and collaborative technologies help advance business processes in sales, customer service and improve the interactions between employees, partners and customers. Salesforce has made great advancements in cloud, social and mobile technology, as I have assessed and my colleague did too.

I thought Dreamforce would be a good time to investigate the state of its analytics that have been evolving since last year. I have spent the last couple of decades in the analytics industry across business and IT and thought it might be useful to provide objective analysis on Salesforce Analytics so I went to educational sessions on the products and demonstrations of their software and use by customers. I also has noted in my analysis from the 2011 Dreamforce event that they needed to improve and was not one of its strengths. The role of business analytics is critical for Salesforce’s entire software portfolio, and especially for software within sales organizations, of which almost two-thirds (64%) plan to improve their sales analytics.

Salesforce has improved its dashboards and reports, making them easier to create and simpler to navigate. It has hired expertise from other business intelligence companies to energize its efforts. The company’s Summer ’12 release included key technical advancement in joining reports, filters and bucketing data for analysis and presentation. It included calculated columns, which let users create new derived metrics more easily than they could if they had to work with a database analyst. What Salesforce outlined for the future, some of which it says will be available in the Winter ’13 release, is more filtering and sorting on aggregates. Users will be able to lay out charts in a dashboard from built reports and create combination charts with line over bar charts or specifically laid-out matrix reports. It also is planning to provide trending analytics through storing the changed data but only plans to store for up to one year. Salesforce was proud to provide shared folders across devices, but subfolders are not planned, which for anyone managing BI content across teams or categories is not acceptable.

A significant number of issues point to a lack of maturity in its efforts; for instance, users cannot change colors and related themes in business charts. As one customer said, having lots of charts on the screen with the same color array does not work. If you read my recent rant on the pathetic state of dashboards then you should realize that the current practice of placing a series of charts on a screen is now antiquated and ineffective at informing business. It fails to provide the intelligence business needs to have the information spell out in English what is the changing metrics and provide guidance on what is most important to act on and is not contextual to a specific role. Salesforce laid out plans to expand dashboards across mobile technologies to ensure those devices can keep pace with its overall platform and accessibility advancements. But Salesforce must focus on its presentation and its metrics and make sure to not fixate on key performance indicators, which is not the only or best presentation approach, as I have written.

I stepped back and thought about our research, which found a high priority on simpler and more intuitive analytics, according to 89 percent of the more than 2,800 organizations we researched in our business analytics benchmark. Business is also looking for methods to search for specific information within business analytics (83% of organizations) and visual and data discovery in (78%). In addition, 69 percent of analysts across line-of-business areas spend the majority of their time with data-related tasks. The requirement to blend data across sources is still a major inhibitor; 88 percent of organizations use spreadsheets universally or regularly. Salesforce is not focusing closely enough on overcoming these issues, which is an indicator of their understanding the market and resources available to address them.

While Salesforce struggles to advance its basic business intelligence capabilities and develop the analytics its customers want, its partners in business intelligence have a great opportunity to meet the demand for intuitiveness and capabilities. Integrating independent business intelligence providers into Salesforce is not always easy but most have provided a way to have it seamlessly be part of the application. The challenge is more around direct access to the Salesforce data that requires development and use of its proprietary API and is not a standard database connectivity method. I walked the Cloud Expo at Salesforce Dreamforce conference and sat in on these vendors demonstrations and it was clear that the size of the audience and capabilities presented that they are addressing the gaps in Salesforce analytics.

Nevertheless, a large number of business intelligence and analytics providers are partnering with Salesforce to capitalizing on this gap of sophistication. The list of certified partners on the AppExchange includes BIRST, Cloud9 Analytics, Domo, Gooddata, InetSoft, QlikView and RoamBI, along with vendors I could not find in AppExchange, including MicroStrategy and Tableau, though they were at Dreamforce demonstrating capabilities that are not yet certified or listed in the AppExchange. Even KXEN was demonstrating how to apply predictive analytics to help guide sales opportunities through its predictive lead scoring.Our firm has been tracking these vendors, and many can plug the gaps in Salesforce’s offerings, but it requires effort to integrate them and make them easily accessible from within Salesforce. Among those business intelligence vendors that do not have direct API access to Salesforce, some have partnered with data integration vendors such as Informatica, Information Builder iway and SnapLogic, who can help get data from Salesforce and place into a database. This need for improving access to data in the cloud was a critical factor for investment according to our research.

Salesforce makes it difficult for users to find their partners. The AppExchange lacks a category for analytics or business intelligence, but if you’re smart enough to navigate into the sales category you can find the vendors, which indicates the company assumes that everyone is just looking for sales analytics though those have a lot of room for improvement. If you navigate into customer service, marketing or other business and technology areas you cannot find any categorization to make it easier to find analytics vendors. This is a sad state of affairs for a company whose platforms, including Force.com and Database.com, are being used to generate a broad range of applications that need analytics, including those from its partners.

I am not sure how Salesforce’s efforts in analytics are going to evolve, but it’s not keeping pace with about a dozen of other providers it partners with and should be addressing the part of our Value Index assessment including usability, manageability and adaptability. This means customers either must be very patient and wait to get capabilities in the coming years that other vendors already provide, or they can transition to Salesforce partners sooner rather than later. Salesforce has had a rough go in trying to make analytics a separate product to charge for, then realizing analytics is just a set of feature it can provide in the premium editions of its products, as communicated in its own product blog. Nevertheless, Salesforce needs to better present its portfolio of partners to keep its customers satisfied and not ignore partners in its presentations and communications.

The pressure for better analytics will get larger, not smaller. If it does not make an acquisition to advance its analytics technology, Salesforce may have a rough ride ahead.

Regards,

Mark Smith

CEO & Chief Research Officer

If you want to hit the booking and revenue targets required to operate a business, you have to manage your sales forecast and pipeline. Optimally you should be able to monitor and act upon them any day of the week and make adjustments whenever you need to. Unfortunately, most organizations have to wait until they finish their manual efforts at the end of the month or quarter, or they miss critical changes in deals and behavior because they rely only on reporting from their sales force automation (SFA) software.  

I have seen this gap in hundreds of sales organizations, including one that I worked with in the 1990s. The SFA package I used then could not supply enough information about the activities that determined changes to the forecast and the potential of the sales pipeline. It kept little information on changes in the movement of sales opportunities and had no capability for time-series analysis to assess small changes to the sales forecast. I had to build some custom sales analytics on top of the application to provide what sales staff needed to be effective. 

Today, 20 years later, not much has changed with SFA. Providers like Microsoft, Oracle, salesforce.com and SAP all have the same issues that they are beginning to address with new applications, and our research identifies a high level of dissatisfaction with SFA’s ability to meet the needs of sales operations and management. 

Managing the changes that happen between the time a sales opportunity is created to the time it is booked is essential to helping sales people sell. The lack of change tracking and time-series management in SFA is one of the reasons why applications for sales forecasting and pipeline management exist, and they should be part of any organization’s sales performance management portfolio. Our most recent benchmark research in sales performance management found forecasting and planning to be the most important application for sales, and focusing on increasing revenue and improving the efficiency of sales processes was the most important benefit from new investments organizations made.  

Along these lines I have been tracking Cloud9, an application provider that initially addressed sales pipeline management and now has expanded to include sales forecasting. The combination of the two into what Cloud9 calls intelligent sales forecasting complements the company’s existing Pipeline Accelerator applications. 

I recently had a chance to review the Cloud9 sales forecasting application and its value with its sales pipeline application. The new application supports the sales forecast and commitment process. At the top level you can manage forecasts as scenarios to determine optimistic and pessimistic variations from the baseline. This ability gains importance as sales executives work with finance and operational management to develop the potential of the sales organization. Once guidelines and policies and the sales pipeline are rolled up into a forecast, you can communicate the forecast to sales managers and reps for review. After any adjustments, deviations and overrides are completed, the forecast can be submitted for commitment. This approach is like how sales organizations operate making it easy to adapt to existing processes and be more efficient in time required for forecasting.  

The application includes notification and collaboration features to enhance interactions with the sales team. Critical is the ability for sales managers and leaders to work toward an agreed-upon forecast through overrides and adjustments to the bottom-up pipeline for a sales team, territory, district, region or whatever level is being adjusted. To do this Cloud9 includes a one-click look at the past behavior of a sales rep or geography or even a customer to see the probability of a deal or forecast occurring. The quick review of a rep lets you see his or her ranking on the team and overall, along with an accuracy ranking in the form of bar charts. From within the application you can make comments directly to specific reps. In addition the application captures changes to the forecast and pipeline and provides a built-in quick audit review that makes it easy to see what has changed without having to view a separate report that loses the context of the review. 

Cloud9’s forecasting dashboard can provide the agreement and commitment status of the current forecast process and also display the pipeline change under it so you can determine what has changed. The application enables you to examine changes to opportunities moving in and out of the pipeline, from business closed, to deals that have leaked out from deletion and are not just lost, to ones that might have been bloated from setting the deal size too large. The software displays unique visualizations to help you examine opportunities from aging, accuracy and potential. Cloud9’s approach is validated with our benchmark research in sales analytics found that sales organizations rank usability for evaluation criteria and the ability to drill and navigate into the analytics as important capabilities they need. 

Managing a sales forecast and pipeline has always been difficult. Many organizations use spreadsheets or business intelligence software, but those are not designed for the process and lack specific tools to manage this critical sales process. Spreadsheets can also introduce errors and waste time and resources. Also many have expended countless amount of time running reports from their SFA and then email but have found wasted time and lack of any context for taking action for improvement. Nevertheless, for those in sales operations who need to perform additional spreadsheet-level analytics, Cloud9 has an Analyst Suite that can help access its data from Microsoft Excel with an integrated add-in or import data from other systems. 

Having sales organizations participate in the sales forecast and pipeline process is critical to ensuring that everyone is working together on the plan and that any issues are identified early and corrected. Timeliness is critical in sales; our benchmark research in sales forecasting found that 63 percent of sales organizations take more than one week to create and compile a sales forecast, which indicates serious room for improvement. Cloud9 can address needs in sales forecasting through its analytics and collaborative capabilities, which are designed for this essential process. If you use salesforce.com you will find Cloud9 integration very useful to streamline forecasting and pipeline management on its SFA. The software can help not just sales but finance and operations work together to effectively plan the revenue generation activities of their business. 

Regards, 

Mark Smith – CEO & Chief Research Officer

Mark Smith – Twitter

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